For the second time in less than a year, Coastal Energy Corp., a Houston-based, TSX-listed company with assets in Thailand and Malaysia has become the subject of a takeover from a foreign controlled company with links to a foreign government.

This time round, the would-be acquirer — according to documents seen by Financial Post — is Jynwel Capital Limited, an international private equity investment and advisory firm, based in Hong Kong.

Plans call for the $2.3-billion acquisition to be made through Jynwel’s wholly owned subsidiary Strategic Resources (Global) Limited and a Spanish company, Companie Espanola de Petroleos S.A. (In 2011, CEPSA was acquired by International Petroleum Investment Corp. an entity formed by the Abu Dhabi government in 1984.)

“The proposed acquirer will be a newly established entity wholly owned by SRG and CEPSA,” said a letter written by CEPSA and dated early September. Goldman Sachs is acting for the potential acquirer.

The letter describes CEPSA, as an integrated energy company “operating at every level of the oil value chain.” It has been around for more than 80 years, has more than 11,000 employees and is Spain’s fourth largest company.

CEPSA has some operations in Canada including a petrochemical complex in Montreal. CEPSA Química Montréal, formerly Interquisa Canada, was established in 2000 as a joint venture between Société générale de financement and CEPSA. But IPIC has a much larger presence thanks to its 2009 acquisition of Calgary-based NOVA Chemicals

In the two page letter sent to Coastal, reference is made to the “continued assistance” provided to the would-be acquirer “throughout our extensive due diligence review of CEN.”

As a result of that due diligence, the letter states “SRG and CEPSA are prepared to acquire all of the issued and outstanding shares of CEN,” at $20 per share.” The letter touts the merits of the price as it represents a premium (of almost 20%) to the trading price the day before the offer. And over the previous 20 days, the offer represents an even greater premium of about 28%. “We believe this proposal represents attractive and immediate value for CEN shareholders,” states the letter, adding the purchase would be paid for in cash.

Indeed the letter indicates that financing the acquisition won’t be a problem. “The transaction will not be subject to any financing condition,” added the letter, indicating “the transaction terms can be finalized and the related definitive documentation executed within four weeks.” Citigroup is acting for Coastal Energy.

Last November, Indonesia’s Pertamina expressed an “ongoing interest” in buying Coastal. In a letter, a copy of which was also obtained by the Financial Post, Pertamina said it was prepared to pay US$23 a share.

In response, Coastal said “it continuously evaluates strategic alternatives, including but not limited to the potential sale of the Company, to maximize shareholder value.” It added a caveat that “there can be no assurance that any transaction will occur.”

A couple of weeks later Pertamina said it was dropping its acquisition plans because of a disagreement on the price.

“Although the assets are good, the purchase price is too high and do not match the value of the assets,” Pertamina president Karen Agustiawan said at the time.

Sources said the final price is expected to be closer to $22.

There is also the question of whether federal government approval would be required given that the buyer is a government-owned enterprise. It’s unclear whether Ottawa would have to sign off given that Coastal has no Canadian assets. Indeed its only link to Canada seems to be its TSX-listing, a listing it received in June 2011. Prior to that listing Coastal was listed on London’s AIM market.

In a news release Tuesday, Coastal Energy said that there was no transaction to announce and that any material transaction would be announced immediately.

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